TORONTO, May 2, 2013 /CNW/ - The Association of Municipalities of
Ontario (AMO) welcomes the Ontario Budget's proposed investments in
infrastructure, such as roads, bridges and public transit. The Province
is in a better position to invest in communities because it has
controlled costs, including growth in wages and benefits.
Municipalities need better tools to do the same.
"All governments - Federal, Provincial and Municipal - need to work
together to make infrastructure investments that promote safety and
economic prosperity," said AMO President Russ Powers. "The municipal
property tax base cannot support the level of investment that's needed
and the demand exists right across Ontario. The Budget is on the right
track by investing in urban, rural and northern communities."
Specifically, the Budget would expand support for transportation and
transit infrastructure in the Greater Toronto and Hamilton Area, invest
$100 million in 2013-14 for roads and bridges in northern and rural
areas and make the existing Provincial gas tax transfer permanent.
Currently, two cents in gas tax revenue is transferred to
municipalities for every litre that's sold.
The Budget emphasizes the Ontario's government's success in controlling
costs, particularly with respect to wages and benefits; and notes that
it has been more successful than municipal governments. For some time,
municipalities have been calling on the Province to provide the tools
that they need to achieve similar results. Changes to Ontario's
interest arbitration system are the most obvious and pressing.
"The Ontario Government says it is confident that broader public sector
partners can work together to control wage and benefit costs while
protecting services. Municipalities are not. Current economic
conditions have not prevented interest arbitrators from awarding
extremely high wage and benefit increases for emergency service
employees. These increases will continue without changes to Provincial
legislation - and four attempts to balance the system have failed in
the past 12 months."
More detailed Budget analysis will be provided by AMO through its free
Breaking News Alerts and weekly Watch File. See www.amo.on.ca.
Ontario Budget Analysis
2008 Upload Agreement
The 2013 Ontario Budget would honour the 2008 Provincial Municipal
Fiscal and Service Delivery Review agreement to upload Provincial
social service and court security costs from the municipal property tax
The 2013 Ontario Budget's commitment to infrastructure investment will
make Ontario communities safer, more competitive and more prosperous.
Ontario's joint 2008 Provincial Municipal Fiscal and Service Delivery
Review (PMFSDR) showed that Ontario would need $6 billion in news
infrastructure investment every year for 10 years to address our
province's infrastructure deficit.
As part of its response to this demand, the Ontario Government agreed to
upload Provincial social service and court security costs from the
municipal property tax base over a 10 year period. The Ontario
Government has consistently honoured this agreement and the commitment
has allowed municipalities to focus on core municipal programs and
services, and to better address their infrastructure demands.
Ontario municipalities own more infrastructure than any other order of
Government - Federal, Provincial or Municipal - yet the municipal tax
base limited. Ontario municipalities receive about 9 cents of every tax
dollars. This is not sufficient to meet their infrastructure needs. All
three orders of government need to work together to meet Ontario's
The 2013 Budget would:
Invest $100 million in 2013-14 for roads and bridges in northern and
Make the existing provincial 2 per cent per litre gas tax transfer
Create select High-Occupancy vehicle (HOV) lanes in the Greater Toronto
and Hamilton Area into High-Occupancy toll (HOV/HOT) lanes, where
carpoolers continue to drive for free but other drivers could choose to
drive in the HOV lanes for a toll
Expand support for transportation and transit infrastructure in the
Greater Toronto and Hamilton Area - details to follow.
Social Service Costs
The Budget makes a number of social service related commitments. These
changes have the potential to increase costs for municipal governments
although we do not have an estimate of the municipal impact yet.
Currently, the Ontario government is taking on increasing
responsibility for funding its own social service programs, without
having to rely on Ontario's property tax base. This is the primary
objective of the 2008 PMFSDR Review and recent history has shown that
Ontario municipalities were wise to ensure that income redistribute
programs are funded through the more dynamic income tax base. Property
taxes should only fund programs and services related to property. AMO
expects to be fully consulted by the Ontario Government as these social
service changes are developed.
Rising Emergency Service Costs
Ontario municipalities are deeply concerned about the unchecked rise in
emergency service costs. Wages and benefit increases in this area are
greater than increases for other municipal employees, the rate of
inflation, increases for Ontario's population, and the capacity of many
municipal governments. For example, the OPP's collective agreement will
amount to a minimum wage increase of at least 8.5 per cent for 2014,
and recent decisions by interest arbitrators have awarded fire fighters
contracts of up to 24 per cent over three years. Ontario municipalities
will continue to battered by these increasing costs without legislative
changes to Ontario's interest arbitration system. AMO has made clear
and balanced recommendations to address these costs. However, four legislative attempts to address
the problem have failed in the past 12 months.
Ontario Municipal Partnership Fund
The budget reaffirms a decrease to the Ontario Municipal Partnership
Fund (OMPF) by $25 million in 2014. AMO remains extremely concerned
with this decrease. It is occurring at the same time as the government
is consulting separately on the OPP costing formula and key property
assessment issues during an OMPF transitional year. The potential for
unintended consequences is great. In addition, the budget contains
changes to the social assistance system which will have municipal cost
implications starting in 2014. In 2014, municipalities remain
responsible for funding 14.2% of OW benefit costs. At the same time,
the government has announced the end of OMPF reconciliation as of
2010. This increased municipal exposure to increased social assistance
costs and offers no corresponding offset thought the OMPF.
Historically this had always been the case.
AMO again urges the government to reconsider the order of these reviews
and in the meantime, restore $25 million to the OMPF envelope in 2014.
These changes are occurring while the 2013 OMPF is in transition.
Allocations have not been calculated using up-to-date figures and adds
to the challenges 2014 pose for municipalities.
Source Water Protection
The budget included is $13.5 million over three years for drinking water
source protection. This will assist small and rural communities.
Additional details are pending.
AMO is a non-profit organization representing almost all of Ontario's
444 municipal governments. AMO supports and enhances strong and
effective municipal government in Ontario and promotes the value of
municipal government as a vital and essential component of Ontario and
Canada's political system.
SOURCE: Association of Municipalities of Ontario
For further information:
Brian Lambie, AMO Media Contact, 416-729-5425, firstname.lastname@example.org
Follow AMO on Twitter: @AMOPolicy